Presentation - subject to modification during presentation -

Speech 25th jubilee of FAW-Volkswagen-Audi

Rupert Stadler, Chairman of the Board of Management of AUDI AG

Mr. Qin,

Board Members of FAW and FAW-Volkswagen,

Colleagues and Guests!

Ni hao and welcome to Foshan!

On behalf of AUDI AG, I am delighted to welcome you to our second Chinese automobile plant! On the occasion of our 25th jubilee of partnership, I want to point out that FAW, Volkswagen and Audi are three strong partners, with a shared roadmap.

Which location would be more appropriate to celebrate, than our new plant site here in Foshan?

We were lucky to meet First Automotive Works in Changchun in 1988. Today – a quarter of a century later – I conclude: With this cooperation, we ventured a lot and gained everything! More than 400,000 deliveries in China in 2012, this was an increase of nearly 30 percent in just one year! We continue this momentum with the dealership in this country. Currently, every week we are opening another one! So we will already have 700 dealers in China by 2020.

Ladies and gentlemen,

today, we will show that we kept a very special promise: As announced, we have sold our second million cars here in just three years. The first million took us twenty years. And that’s also to your credit, my dear colleagues. Thank you for your fantastic support! Xiè Xiè!

Ladies and gentlemen,

in the first half of this year alone, the Audi brand delivered 780,500 automobiles to its customers worldwide – an increase of 6.4 percent compared with the previous year. We have firmly set our sights on a sales target of two million cars by the year 2020. That’s why we are further expanding our worldwide production network.

This country is our biggest single market for the second consecutive year already. We have noticed that our joint activities here are worthwhile: Without exception, all the cars produced in Changchun are the market leaders in their segment – from the Audi Q3 and Q5 to the long versions Audi A4 L and Audi A6 L. And do you know why? We adapt our product offering to the wishes of our Chinese customers. We have always placed importance on the joint activities of our engineers from Germany with yours here in China. We build upon your expertise and your know-how. This resulted for example in a tailored infotainment package for China. Or our spacious long versions, which we were the first premium manufacturer to produce especially for this market. The high demand proves we were right.

Ladies and gentlemen,

you recently honored us for the fourth time in a row as the premium brand with the highest customer satisfaction. FAW-Volkswagen has always provided us with important stimulus. So let us continue to benefit from our creative potential. For example, we will soon start a very special research and development project with you – with FAW-Volkswagen. I’m talking about a drive system of the future. You know that as a modern industrial company, the environment and climate protection are essential to us.

We have the most economical TFSI engine from local production – and a large lead ahead of our competitors! Four out of five of our locally produced cars are fitted with this engine. We now have to build on that: As hybrid vehicles, we have so far imported the models Audi Q5 quattro, Audi A6 and Audi A8 L. We intend to, and we will, now take the next, highly efficient step in the field of alternative drive systems. And within the framework of a joint project we will also bring the plug-in-hybrid technology to China. The special advantage of this concept is that a combustion engine and an electric motor work together effectively. This allows you to drive locally electric and with zero emissions. And you charge the batteries using a normal electrical socket. At the same time, the plug-in hybrid car has a combustion engine to provide the required range for long distances.

As of this year, all locally produced models include the start-stop function and brake-energy recuperation as standard equipment. With this efficiency program, and our plug-in-hybrid initiative, we will extend our leadership on efficiency and environmental compatibility! For us, protecting the environment and the climate also involves how the energy for the fuel tank or the battery is obtained, how easily a car can be recycled at the end of its lifecycle, and how we produce our cars. That’s why for example we designed this factory right from the start as a “green factory”. We will operate it fully eco-logically. We have applied innovative architecture and equipment. And we have optimized our manufacturing processes so that they are energy-efficient. The Chinese Ministry of Construction has already awarded us its best rating for this plant: the Green Building Evaluation Standard with three stars. And the US Green Building Council has given it the LEED Gold Certification sustainability award.

Ladies and gentlemen,

this car plant will be full of ultramodern technology – from press shop to body shop to paint shop and assembly. As of 2014, we will produce our new Audi A3 Sedan at this plant. That is already well known. And I’m sure the most recent decision will also be very popular here: Because in addition, we will also produce our new Audi A3 Sportback here in Foshan. With these two models – the Audi A3 Sedan and the A3 Sportback – as well as with the Audi Q3 produced in Changchun, we are introducing localization in the premium compact class. This production plant will be a great help in doing so: As of 2014, we will produce 150,000 cars each year in Foshan. Together with the plant in Changchun, we will then have a total production capacity of up to 700,000 automobiles in this country.

Ladies and gentlemen,

just imagine what the situation would look like today if we had not taken this first step 25 years ago. The fact that we are standing here today is due to the optimism of entrepreneurs. In a country that has become a second home for us, we are looking forward to the ongoing collaboration with FAW-Volkswagen.

Note on fuel consumption figures at DATFurther information about the official fuel consumption figures and official, specific CO2 emissions of new passenger cars can be found in the “Guide to fuel consumption, CO2 emissions and electricity consumption of new cars,” which is available free of charge from all sales outlets and from DAT (Deutsche Automobil Treuhand GmbH), Hellmuth-Hirth-Strasse 1, 73760 Ostfildern-Scharnhausen, Germany (http://www.dat.de).